Ride-hailing boom will mean decades of slow growth for carmakers

Southfield/New York:Â Ride-hailing companies like Uber Technologies Inc. will see demand boom between now and 2040, hobbling global auto sales growth, according to a new study from IHS Markit.

As a growing number of consumers turn to ride-hailing in shared cars that rack up more miles than personal ones, new light-vehicle sales growth will slow to a crawl. The mobility-as-a-service industry will itself buy more than 10 million cars in 2040 in the four markets examined in the studyâChina, Europe, India and the USâcompared to about 300,000 in 2017, but it wonât be enough to prevent new car sales growth from slowing âsubstantially,â IHS Markit said.

âA great âautomotive paradoxââwhere more travel via car than ever, but fewer cars will be needed by individualsâwill be a defining quality of the new automotive future,â said Daniel Yergin, IHS Markit vice chairman. âThe shift is just beginning.â

Electric demand

As would-be-drivers hail more shared rides between now and 2040, the cars they call will be changing as well. About 30% of new autos sold in the four key markets will be fully electric or plug-in hybrids, up from about 1% last year, the study found.

Consumers will take a bigger interest in electric cars as their costs drop, driven by cheaper battery packs. Right now, battery packs costs about $200 per kilowatt hour, said Tom De Vleesschauwer, transport and mobility practice leader at IHS Markit. Carmakers need to get costs down to about $100 per kilowatt hour to be competitive with a gasoline-powered car, IHS Markit said, forecasting price parity in the 2030s.

But just because electrification is on the rise doesnât mean oilâs going away. Although oil will no longer have a âmonopolyâ as a transportation fuel, cars powered by gasoline or diesel will still make up about 62% of new car sales in 2040 in the studyâs four key markets, down from 98% last year.

Cars with an internal combustion engine will still comprise a majority of new car sales in 2040, especially as hybrids gain in popularity, IHS Markit said.

âThe automotive future will be defined by transformation unlike anything weâve seen since the dawn of the automotive age,â De Vleesschauwer said. âStill our analysis shows that there will be much that looks familiar, even in 2040.â